Crowdfunding has been around for a while, and while some projects have struggled to get funding, Bitcoin may be the answer.
Let’s look at the root of the problem and how encryption can solve them.
in and out…
Crowdfunding is a practice where you can donate funds (including cryptocurrencies like Bitcoin, Litecoin and more) to projects, associations or people to develop ideas. It is a very powerful mechanism and tool to innovate and support social enterprise. Different platforms such as Kickstarter and Indiegogo haven’t stopped; the Web 2.0 crowdfunding movement that spawned multi-billion-dollar tech startups like Oculus and raised millions for thousands of causes is now maturing .
Crypto crowdfunding has the potential to be a network connecting people and their ideas. Today, crowdfunding has shrunk considerably due to its reliance on traditional finance, which limits its use by the vast majority of the world. While this is good in theory and has worked so far, the main problem is the reliance on traditional financial infrastructure, which is not only costly but also globally fragmented.
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Most crowdfunding platforms are only found in 30 countries. To date, the cost of running a crowdfunding in this network has been prohibitively high due to the many intermediary third parties involved. Crowdfunding platforms charge an average of 7% per successful project. Can Crypto’s High Transaction Fees Beat Traditional Competitors?
Crowdfunding and cryptocurrencies: a pair of ace…
Many platforms have struggled to rely heavily on traditional financial infrastructure; this has caused some crowdfunding platforms to move to a “web 3.0” model.
An important example is Kickstarter, which decided to move away from relying on Stripe to create its own crowdfunding protocol on other blockchains. This could make sense for equity-based crowdfunding, which could enable platforms and their users to invest in new companies and their ideas.
A prime example of these worlds coming together was last year bitcoin smile, raised about 1.8 BTC. Bitcoin Smile is an initiative to raise funds and provide free dental care to poor people living in rural El Salvador. Another project that can be used as an example is Kivéclair, a development project to educate people about Bitcoin in the Democratic Republic of Congo.
While these are just a few examples of early cryptocurrency crowdfunding, these do provide a valid source and hope that Bitcoin can still bounce back through its caring bull and bear community.
Featured image from Pexels, Charts from TradingView.com The writer of this content is not associated or affiliated with any of the parties mentioned in this article. This is not financial advice.